Re-hospitalizations are estimated to add $26 billion to the United States healthcare system, yet many are a result of poor care transitions between hospitals and post-acute care providers and could be avoided with proper care management and discharge planning.1 The Centers for Medicaid and Medicare Services (CMS) has placed increased focus on reducing readmissions, leading to a decrease in all-cause readmissions from 19.0% in 2011 to 18.4% in 2012. However, in a recent report, CMS acknowledges not much is known about the ways in which hospitals are able to reduce readmissions.2 Studies showing mechanisms for reducing readmissions often 1) focus on single conditions like acute myocardial infarction (AMI) or congestive heart failure (CHF), 2) provide case studies describing one, or a few, particular institution(s) or 3) focus on costly hospital discharge processes and care transition case management programs, but not on the network of post-acute choices. CMS' Partnerships for Patients initiative, a public-private partnership, includes 18 different programs related to reducing readmissions,3 none of which seem to focus on the selection of a post-acute network, although recent evidence shows network development may be a key factor. The announcement of readmission penalties in 2010 and implementation in October 2012 changed the dynamic between hospitals and post-acute providers, altering relationships and organizational structures along the continuum. The overall goal of this dissertation is to understand changes in organizational linkages and mechanisms through which hospitals can reduce readmissions, combining qualitative and quantitative data to gain a more comprehensive understanding compared to previous studies. The specific aims of this dissertation are to: 1) describe hospitals/health systems' response to readmission penalties, 2) compare the response of a for-profit hospital chain with a not-for-profit hospital chain, and 3) qualitatively understan the mechanisms hospitals use to reduce readmissions. A qualitative and quantitative approach using the policy change as an instrument will provide unique insight into readmission reduction strategies. The proposed dissertation is significant because the readmission penalty has been important in shifting hospitals' attention and because of increasing proportions of Medicare discharges to skilled nursing facilities. The approach is innovative because it combines quantitative and qualitative data to provide a more comprehensive and generalizable conclusion. The expected outcome of this work is a thorough understanding of hospitals' approaches to policy changes and to inter-organizational relationships and processes which help to reduce readmissions.